It’s a bad day to be in stocks.
Markets across Europe are tanking on Wednesday morning after oil prices nose-dived overnight. Here’s how the FTSE 100 looks at 10.20 a.m. GMT (5.20 a.m. ET):
Indices across Europe aren’t much better either:
- DAX: -2.02%
- CAC 40: -1.58%
- IBEX 35: -2.25%
- EUROSTOXX 50: -1.89%
Michael van Dulken, head of research at Accendo Markets, says in an email this morning:
Equity markets nursing losses this morning, backtracking from valiant attempts to deliver breakouts. The driver? I’m afraid it’s oil again, and markets are also coming round to the fact that there is a distinct absence of good news doing the rounds to keep the major indices up around recent highs.
OPEC’s mouthpiece Saudi Arabia has said no to global production cuts on account of a lack of trust. A freeze is about as likely given Iranian and Iraqi reluctance. Oh and the cartel’s Secretary General has as good as admitted that US Shale has become the de-facto swing producer, which will only serve to hinder any oil price rally.
And that’s before we add political (UK Brexit, US Trump) to the equation. FTSE broken back below 5900, extending its retrace from recovery highs. DAX broken below 9300 to continue its fall-back from rebound highs. Wall Street back from its highs, but yet to test 16275 support. Gold testing trendline across recent highs at $1230 as global risk appetite wanes to the benefit of safehavens.
In short, there’s a lot of bad news about but not much good news.
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